By

Pooja Adhikari (A1)

 What is Lean?
• Lean production focuses on eliminating waste in processes (i.e. the waste
of work in progress and finished good inventories)
• Lean production is not about eliminating people
• Lean production is about expanding capacity by reducing costs and
shortening cycle times between order and ship date
• Lean is about understanding what is important to the customer
 Benefits
• Lean provides tangible benefits
• Reduces costs not just selling price
– Reduces delivery time, cycle time, set-up time
– Eliminates waste
– Seeks continuous improvement
• Improves quality
• Improves customer ratings and perceptions
• Increases overall customer satisfaction
• Improves employee involvement, morale, and company culture
• Helps “transform” manufacturers
 Why is Lean Manufacturing Important and How Can it Help?

Eliminate Waste
• Waste is a negative factor for cost, deadlines and resources. It
provides no value to products or services
Improve Quality
• Improved quality allows companies to stay competitive and
meet the changing needs and wants of customers.
Reducing Costs
• Overproduction or having more materials than is required
creates storage costs, which can be reduced through better
processes and materials management
Reducing Time
• Wasting time with inefficient working practices is a waste of
money too, while more efficient practices create shorter lead
times and allow for goods and services to be delivered faster
What are the 5 Principles?
 What is cost audit?
• Cost audit is the verification of cost accounts to determine the accuracy of
cost accounting records.
• It is a means to ensure that cost accounting records are in track with the
costing principles, plans, procedures and objective.
• It also check the maintenance of cost books, accounts & records.
 Objectives of Cost Audit

• Maintaining the accuracy of the data related to cost.

• Coverage of all arithmetic data in any account book. 
• Maintaining all cost-related principles and complete adherence to
preparing cost accounts.
• Detect errors, drawbacks, and frauds in accounts and correcting them
immediately.
• To see if all features of cost audit are properly followed.
• Checking the overall working condition of the cost department also comes
under the process of cost audit.
• To ensure proper management and usage of cost strategies at the right
time. 
• Develop correctness among internal auditors of the company. 
 Types of Cost Audits

Efficiency Audit
• Efficiency Audit is directed towards the measurement of whether corporate
plans have been effectively executed.
Propriety Audit
• The propriety Audit is concerned with executive actions and plans bearing
on the finance and expenditure of the company.
Statutory Audit
• It is the compulsory audit that required maintaining the related books and
accounts of specified establishments.
 Advantages
• Ensures Correctness Of  Cost
Records
• Identifies Loopholes And Frauds
• Fixation Of Price
• Cost Control And Reduction
• Beneficial For The Government
Disadvantages
• Lengthy Process
• Expensive Process
• Not Applicable For Small
Business
• Chance Of Inaccuracy